In Indian contract law, the performance of contracts is governed by specific rules and regulations outlined in the Indian Contract Act, 1872. These provisions detail the obligations of parties, the manner of performance, and the consequences of non-performance, ensuring clarity and enforceability in contractual relationships.

MEANING AND DEFINITION

Performance of a contract refers to the fulfillment of the obligations that each party has agreed to under the terms of the contract. According to Section 37 of the Indian Contract Act, 1872, “The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this Act, or of any other law.” (India Code)

OBLIGATION OF PARTIES TO CONTRACTS

Section 37 emphasizes that parties are bound to perform or offer to perform their promises. This obligation extends to the legal representatives of the promisor in the event of the promisor’s death, unless a contrary intention is evident in the contract. For instance, if A agrees to sell a piece of land to B and dies before the sale, A’s legal representatives are obligated to complete the transaction, provided the contract does not state otherwise. (India Code)

OFFER TO PERFORM (TENDER)

An offer to perform, also known as a tender, is addressed in Section 38 of the Act. For a tender to be valid:

• It must be unconditional.
• It should be made at a proper time and place, allowing the promisee a reasonable opportunity to ascertain that the person making the offer is competent to perform the contract.
• It must be made to the promisee or their authorized agent.

If the promisee refuses to accept a valid offer of performance, the promisor is not responsible for non-performance and retains the right to claim compensation for any loss incurred due to the refusal. (India Code)

BY WHOM CONTRACTS MUST BE PERFORMED

Sections 40 to 45 of the Act detail who is qualified to perform a contract:

• Section 40: Stipulates that if it appears from the nature of the case that it was the intention of the parties to any contract that any promise contained in it should be performed by the promisor himself, such promise must be performed by the promisor. In other cases, the promisor or his representatives may employ a competent person to perform it.
• Section 41: Specifies that when a promisee accepts performance of the promise from a third person, he cannot afterwards enforce it against the promisor.
• Section 42: Addresses the devolution of joint liabilities, stating that when two or more persons have made a joint promise, then, unless a contrary intention appears by the contract, all such persons must jointly fulfill the promise.
• Section 43: Allows the promisee to compel any one or more of the joint promisors to perform the whole of the promise.
• Section 44: Provides that when a release is given to one of the joint promisors, it does not discharge the other joint promisors.
• Section 45: States that when a person has made a promise to several persons jointly, then, unless a contrary intention appears by the contract, the right to claim performance rests, as between him and them, with them during their joint lives, and after the death of any of them, with the survivor or survivors, and after the death of the last survivor, with the representatives of all jointly.

TIME AND PLACE OF PERFORMANCE

Sections 46 to 50 outline rules regarding the time and place of performance:

• Section 46: When a promise is to be performed on a certain day, and the promisor has undertaken to perform it without application by the promisee, the promisor may perform it at any time during the usual hours of business on such day and at the place at which the promise ought to be performed.
• Section 47: When a promise is to be performed on a certain day, and the promisor has not undertaken to perform it without application by the promisee, it is the duty of the promisee to apply for performance at a proper place and within the usual hours of business.
• Section 48: When a promise is to be performed without application by the promisee and no place is fixed for the performance of it, it is the duty of the promisor to apply to the promisee to appoint a reasonable place for the performance of the promise, and to perform it at such place.
• Section 49: When a promise is to be performed at a certain place, and the promisor has not undertaken to perform it without application by the promisee, it is the duty of the promisee to apply for performance at such place.
• Section 50: The performance of any promise may be made in any manner, or at any time which the promisee prescribes or sanctions.

PERFORMANCE OF RECIPROCAL PROMISES

Reciprocal promises are mutual promises that form the consideration for each other. Sections 51 to 54 and Section 57 deal with their performance:

• Section 51: When a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promisee is ready and willing to perform his reciprocal promise.
• Section 52: In contracts with reciprocal promises where the order of performance is expressly fixed by the contract, they must be performed in that order; and, in contracts where the order is not expressly fixed, the order of performance shall be that which the nature of the transaction requires.
• Section 53: When a contract contains reciprocal promises, and one party to the contract prevents the other from performing his promise, the contract becomes voidable at the option of the party so prevented; and he is entitled to compensation from the other party for any loss which he may sustain in consequence of the non-performance of the contract.